Median Compensation

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Median Compensation

by [email protected] » Mon Jun 02, 2014 9:52 pm
Hello Experts,

Whats the simplest way to solve this question?

Thanks
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by sukriti2hats » Mon Jun 02, 2014 11:16 pm
Hi [email protected],

The way I would do this question is as follows,

Change in median base salary from 1999-2000 = 14%

It means the salary in 2000 is 14% higher than that of 2000. Let the salary in 1999 be x
So, salary in 2000 = salary in 1999 + 14% of salary in 1999
100000 = x + 0.14x
100000 = 1.14x
x = 100000/1.14 = 87719.298
The answer closest to this value in the option is 87700.

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by theCodeToGMAT » Tue Jun 03, 2014 1:03 am
(100000 - X)/X = 14/100

10000000 - 100X = 14X
10000000/114 = X

Approx = 87....

{C}
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by GMATGuruNY » Tue Jun 03, 2014 1:52 am
[email protected] wrote:Hello Experts,

Whats the simplest way to solve this question?

Thanks
The chart indicates that the median base salary for 2000 -- 100,000 -- is 14% greater than the median base salary for 1999.
We can PLUG IN THE ANSWERS, which represent an approximation of the median base salary for 1999.
When 14% is added to the correct answer choice, the result must be approximately 100,000.
Since the median base salary for 1999 can be determined, eliminate E.
Since the median base salary for 1999 must be LESS than the base salary for 2000, eliminate D.

Answer choice C: 87000
87000 + (14/100 * 87000) = 87000 + 12180 = 99180.
Since the other answer choices are SMALLER, they will yield a value less than 99,180 and FURTHER from 100,000.

The correct answer is C.
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by [email protected] » Tue Jun 03, 2014 10:42 am
Hi Shibsriz,

Each of the responses to your question provides a proper math explanation, so there's nothing to add there. In situations that involve a percent change from one year to the next, it's important that you follow this rule: "math moves forwards"

Here, the mean salary in 2000 was 14% GREATER than the mean salary in 1999. You MUST do the math "forwards" from 1999 to 2000. Setting up the equation would yield:

X = salary in 1999

X + .14X = 1.14X = salary in 2000

Some people make the mistake of trying to go "backwards" with the math. The math doesn't work that way though, so make sure that you're doing your percent change calculations forwards.

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by [email protected] » Tue Jun 03, 2014 3:19 pm
The table tells us that the median salary in 2000 was 14% greater than the median salary in 1999.

IMPORTANT: A lot of students look at this and conclude (incorrectly) that the median salary in 1999 was 14% LESS than the median salary in 2000.
This is a common error that the the GMAT loves to test. In fact, answer choice B ($86000) is the incorrect answer choice that many students will choose.

This misconception is so prevalent among the general public that I wrote an article about it last month: https://www.beatthegmat.com/mba/2014/05/ ... ts-part-ii

Cheers,
Brent
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